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Only 40 Percent of Pell Grant Recipients Get Bachelor’s Degrees

Let me start off with a caveat (no doubt, newspaper and magazine editors would tell you, a horrible way to start a blog post): The headline on this epistle is “informed speculation” on my part.

Nevertheless, based on statistical examination of the Pell Grant/graduation rate relationship for about 750 colleges and universities, aided by Chris Denhart and Jonathan Robe, I would “guesstimate” that roughly 40 percent of full-time, first-year students receiving Pell Grants graduate within six years (from four-year institutions). This is significantly lower than the graduation rate of non-Pell recipients, which appears to be closer to 60 to 65 percent.

Looking at the four-year graduation rate, regression analysis (with several other variables introduced for control purposes) suggests that for every 1 percent of a student body receiving Pells, the graduation rate falls by roughly one-quarter of a percentage point. Suppose Yuppie School A has 10 percent Pell recipients, while Urban Gritty University B has 50 percent. Our statistical analysis predicts that the graduation rate will be 10 percentage points higher at Yuppie University, even after controlling for such oft-cited other factors as admissions selectivity, the incidence of majors in the STEM disciplines, the private/public status of the school, or race.

Now these estimates may be off; the sample is “only” about 750 schools (albeit virtually all of the well known and large schools are included), there may be some “omitted error bias” in the statistical model (although the model itself has very high overall explanatory power), etc. There is no substitute for direct evidence based on the actual experience of individual students. But, that data is not readily available, so we try to estimate what it would show.

To be sure, there was some detailed analysis of the 1994 cohort of entering freshman. My sidekick Jonathan Robe unearthed some of this data as reported by data gatherer extraordinaire Tom Mortenson (of postsecondary.org). Mortenson’s data show considerably higher Pell six-year graduation rates, around 50 percent for Pell recipients. However, there are two problems with this data. First, it is quite old, dealing with kids entering college 17 years ago. Second, the aggregate graduation rates reported are somewhat higher than are generally reported elsewhere.

Let’s for the sake of argument assume the six-year graduation rate for Pell recipients is, in fact, 40 percent. There are two scandals here. The first is that we have been spending of late well over $40-billion annually on a program with a huge failure rate—60 percent of four-year college participants never graduate—or at least within six years. For every two successes, there are three failures. To be sure, there may be some gains to students who flunk out of college in mid-course, but these persons are also viewed by some as failures, as mere dropouts that lack the Right Stuff to graduate. So the Pell program appears to be, at the very minimum, very inefficient in achieving its original goals of promoting equality of opportunity in America (and even if I am wrong, and the true Pell graduation rate is 50 percent, we still have something of a scandal—for every graduation success, there is a failure).

The second scandal is that the government does not systematically gather or publish the data (at least in any of the documents my colleagues and I read, and we look at a lot of data) on this very important statistic. Within one minute of grabbing a book off my shelf, I learned that in 1991, there were 3,308,000 Americans with incomes between $15,000 and $20,000 a year participating in adult-education programs. Additionally, it was quite easy to find out that in 1970-71 some 456 people received master’s degrees in microbiology. But vital information on how huge hunks of federal funds are spent is not made publicly available, as Arne Duncan himself acknowledged earlier this year. To be sure, the2010 Digest of Education Statistics, (the Ed Department’s major statistical compendium), has 22 tables on collegiate staffing, but only has one inadequate table relating to any kind of graduation rates. This gives you some idea where our Department of Education’s priorities are, and is a travesty packaged within a scandal wrapped with indifference and hypocrisy.

Obviously, the Administration is stonewalling on providing this data. But where is Congress? Where is the House Education Committee’s John Kline or Virginia Foxx? One senator recently asked me for an area where the Congressional Research Service and/or Government Accountability Office might provide the nation a study that would break through some of the layer of secrecy permeating higher education. This is what I think should be considered. We should not have to rely on a lonely academic residing near the armpit of Appalachia to speculate on something so important that we spend $300-billion or so on it every decade.